I keep thinking about this because I've lately been reading Blood Meridian by Cormac McCarthy, and it's just ridiculous. I have to look up 1-2 words per sentence sometimes, something I'm only used to doing for Joyce. Apparently McCarthy is well known for doing this sort of thing.

The book was written in the mid-1980s -- it's modern. But the terms used therein belong to another time, and are mostly unknown to modern English.

How do authors pick up such a broad vocabulary of words that they can effectively disguise themselves as a hundred years older than they are? These words can't be used in day-to-day speech; nobody would understand you. If you can't use them, how do you remember them?

Examples from Blood Meridian: rebozo, shellalegh, hackamore, osnaburg, bungstarter, weskit, jacal, farrier, escopeta, caesura. Not a single one of these words have I ever heard reference to anywhere else in my entire tour of existence.

5 Answers
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Read a lot of archaic and extremely rare books, take notes, and make a point of using your list as a thesaurus. Practice using your list by writing paragraphs or stories as exercises just to get used to where the words fit.

The best way to expand your vocabulary is to read a lot of books with unfamiliar words in them, experiencing them in context. However, there are ways to make this easier:

Seeking out relatively modern authors who have a reputation for using their rich vocabularies well in-context will make these words' meanings at least somewhat plain. (Gene Wolfe is my favorite writer along these lines.)

Reading older books with unfamiliar words will give you a larger number of new words to learn, but more words to look up. Reading these books on an e-reader will help, where looking up a word isn't much more complicated than tapping it on the screen.

Read annotated versions of older books. These will have explanations of concepts and words unfamiliar to a modern audience.

Lastly, you can move outside of reading books and go to reference sources directly:

Browsing dictionaries and thesauri can be a heady if addictive pastime. I don't recommend this to any but the most ardent reference junkies. (Ahem.)

There are books about compiling reference books that may be more digestible. For example, Reading the OED is a reader's journal of reading the entire Oxford English Dictionary.

It may have been written in the mid 1980's but the setting is the in the mid 1800's - you really should expect some archaic, unusual and unfamiliar words in any book set in that timeframe. Particularly so if the dialogue is intended to accurately reflect that of colloquial speech of the time.

Your primary question can be answered in one word: research. Any book set in a historical context and intended to accurately reflect speech of that timeframe will use archaic and unfamiliar words to modern English. It's deliberate.

I've just written a story of around 7000 words that I set in 1611, in a monastery, so wanted to use the old English terms of the day, like 'ye, thou, thee, etc.'
Gaining familiarity with these terms was only done by looking at lots of information about it, and repeating the phrases like 'Where art thou" to make it more familiar to myself, and therefore correct, for this story.

I agree that the best way to improve your vocabulary is to read widely. But I also like subscribing to the OED Word of the Day email service. I save the off-beat words in a list, like kimet (foolish or stupid), psithurisma (whispering, whispering noise), psychopomp (guide to the underworld), nemophilist (person fond of woods or forests), melliferous (yielding or producing honey), preterhuman (outside the bounds of what is human), and timeous (prompt).